By Sam Boughedda
Merck (NYSE:MRK) was lifted to Buy from Neutral, with its price target raised to $130 from $105 by Citi analysts on Thursday.
The analysts said the firm's new estimates are 2-25% ahead of consensus, while their NPV "assumes a very conservative Keytruda tail post-2028."
Merck shares have climbed 1% to just under the $115 mark at the time of writing. In addition, the stock has gained 3% in 2023 and is up over 33% in the last 12 months.
"Our earnings upgrades are driven by materially revised forecasts for MRK's novel ADC for cancer MK-2870/SKB-264 (TROP2), and cardiology agents sotatercept and MK-0616 (CV Data Meets Our High Expectations., Mar-23)," the analysts wrote.
"Each 12-month delay to Keytruda biosimilars represents a c.7% increase in NPV."
They also noted that Merck's portfolio has little IRA-related pricing risk, given rare disease, animal health, and vaccines exposure.